SO, now you understand. If you want to play hardball with professional investors you’d better wear a protective cup.

There were a lot of causes for the sharp drop in stock prices on Tuesday – including the pricking of the speculative bubble in China and computer glitches at the New York Stock Exchange.

But the real reason the stock market gave up all its profits for 2007 in a single day is simple: Those gains were an illusion since Wall Street defied the economic fundamentals to bid prices up in a blatant attempt at profiteering.

That’s not a bad thing, and it’s not the first time that’s happened. In fact, speculative frenzies are not only the most enduring but also the most endearing quality of the stock market.

And that’s why Wall Street should come with the same caveats that smart people use in casinos: If you can’t afford to lose your money, don’t gamble it in the market.

There isn’t time here for a full lesson in recent American history, but what happened was this: the Federal Reserve needed to keep interest rates low to counter the effects of terrorism and other bad things.

Low rates meant that people had a lot of money. And when today’s folks have too much cash they tend to do what every other generation has done: they spend it foolishly on things like $100 million abstract paintings and they bid up stock prices to unreasonable levels.

What you end up with is a stock market that’s too high and gives off a noxious and flammable gas that’s waiting for a spark to ignite it.

On Tuesday, the market exploded.

You obviously saw the headlines. But the story behind the markets sudden collapse began more than eight months ago.

The U.S. economy started showing signs of weakness last spring.

But you can make a reasonable case that a downturn actually began 12 months ago.

Yesterday, Washington announced that the economy grew less than expected in the fourth quarter and that new home sales fell last month by the largest amount in 13 years.

This more pessimistic view of the economy started to take hold when the last employment report came in weaker than anyone (except me) expected.